Monthly Archives: September 2014

Swala Energy Refers Dispute with CEPSA Over Block 12B to Arbitration

Swala Energy Limited (Swala or the Company) reported Monday that its wholly-owned subsidiary, Swala Energy (Kenya) Limited (Swala Kenya), has referred to arbitration a dispute with CEPSA Kenya Limited (CEPSA) in connection with CEPSA’s withdrawal from Block 12B in Kenya.

CEPSA farmed in to Block 12B in Kenya and acquired a 25 percent equity interest. Upon electing to withdraw from the license, CEPSA has indicated it would return its equity interest in accordance with the terms of the Joint Operating Agreement (JOA), returning 8.33 percent to Swala Kenya and 16.67 percent to Tullow Kenya B.V. (Tullow). This would result in Swala Kenya holding a 33.33 percent equity interest and Tullow holding a 66.67 percent equity interest.

Swala Kenya maintains that CEPSA is obliged to return the entire 25 percent to Swala Kenya in accordance with the terms of the Farm-Out Agreement (FOA) made between Swala Kenya and CEPSA. Accordingly, Swala Kenya maintains that CEPSA is in breach of its obligations under the FOA.


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BSO Completes Sale of Otway Basin Permits PEP 167, 175, Re-engages CEO

Bass Strait Oil (BAS or the Company) announced Monday the completion of the sale of Otway Basin permits PEP 167 and PEP 175in Australia and the re-engagement of the Company’s CEO.


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PEP 167 and 175 Sale Completion

On July 11, the Company announced the sale of its equity in onshore exploration permits PEP 167 and PEP 175 subject to regulatory approval. Regulatory approval has now been received and Lakes Oil NL has paid the remaining funds to Bass Strait Oil.

During the year the Company has conducted a review of its business with the objective to identify its core assets and position itself to progress activities in these assets. An outcome of the review was a decision that these permits, which are located in the onshore Otway Basin in Victoria, were non-core to the Company’s future. The Company remains committed to onshore exploration in the western portion of the Otway basin via its equity in PEP 150 (BAS 15 percent).

CEO Re-engagement

The Company is pleased to announce the re-engagement of Steven Noske as its permanent CEO.

In March the Company sought to alter the employment arrangements of the CEO whilst the Company progressed a review of its future strategic direction and continued with its technical evaluation activities in its core Gippsland basin permits Vic/P41 and Vic/P68. These activities have largely been completed and it is appropriate that the Company move into a delivery and growth phase.

Noske has continued to work closely with the Board during this period to ensure that:

  • the core assets are agreed
  • the forward business strategy is recognized
  • focus is placed on the immediate imperatives and,
  • plans are in place to return the Company to growth

Over the year, the Board has appreciated the commitment and input of Noske and is confident that a return to growth can be achieved.

The Company expects to provide a further update on business activities in the short term.

Petrobras Says Sergipe Oil Find To Require Expanded Output Plan

RIO DE JANEIRO, Sept 18 (Reuters) – A giant oil and gas discovery off the coast of Brazil’s Sergipe state holds enough hydrocarbons for state-run Petrobras and its Indian partners to build an expensive undersea natural-gas pipeline and expand development beyond two scheduled production ships, a company official said on Thursday.


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Petrobras, formally known as Petroleo Brasileiro SA , has said it expects to install a 100,000-barrel-a-day floating production, storage and offloading (FPSO) ship in the area in 2018 and another in 2020. Petrobras expects to take bids to build the first FPSO in November.

“These discoveries will require various other production systems but we have planned two so far,” Claudio Madeira, geological interpretation manager for Petrobras, said at an industry event in Rio de Janeiro. “A gas pipeline will be built for this area.”

The pipeline is needed to carry natural gas to shore from the from the FPSOs, he said. Oil will be loaded direct from the FPSOs to tankers.

A growing number of analysts as well as Sergipe state officials have criticized what they believe are delays in developing the discovery. Sergipe holds higher-grade oil in less technically demanding reservoirs than those near Rio de Janeiro, which have received the bulk of Petrobras’ recent investment but are years behind schedule.

While Madeira said Petrobras is still evaluating how much oil and gas has been found in the area’s wells, some as far as 300 kilometers (186 miles) from the country’s northeastern Atlantic coast, government and industry officials told Reuters a year ago they contain at least 1 billion barrels of recoverable oil.

That’s enough to meet all the needs in the United States, the world’s largest oil consumer, for nearly two months. It’s also enough to make Sergipe Brazil’s the biggest new oil region since the 2007 announcement of the subsalt, a series of giant reserves near Rio de Janeiro trapped deep beneath the seabed by a layer of mineral salts.

Libya’s Zawiya Refinery, El Sharara Oilfield Shut

CAIRO, Sept 18 (Reuters) – Libya’s 120,000 barrels a day Zawiya refinery has been shut down after storage was damaged in fighting between armed groups, an oil ministry official said on Thursday.


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The El Sharara field feeding the refinery also remains closed, said Ibrahim al-Awami, head of the inspection and measurement department at the oil ministry.

He said he did not know when the refinery and oil field would resume work.

The closures are a big blow for the government because the refinery supplies the capital Tripoli and the rest of western Libya with fuel products.

The field closure will bring Libya’s oil production down to around 670,000 barrels a day, based on production of 870,000 bpd reported by state-run National Oil Corp (NOC) on Sunday. No output update has been given since then.

Fighting hit the western town of Zawiya in the past few days with at least a rocket hitting a refinery storage tank connecting to the southwestern El Sharara field.

An armed group from Misrata which took the capital in August has been trying in the past few weeks to take an area west of Tripoli held by the rival Warshefana group.

Libya’s oil industry had revived in the past two months after major oil ports in the east reopened following the end of a blockage by a rebel group demanding regional autonomy.

Western powers fear Libya might become a failed state as the weak government is unable to control militias which helped to topple Muammar Gaddafi in 2011 but have now turned their guns on each other.

North Dakota Governor Sees Oil Production Dip From Flaring Rule Change

WILLISTON, N.D., Sept 18 (Reuters) – Some of North Dakota’s oil companies likely will experience a production dip starting next month as they try to meet aggressive new flaring standards, Governor Jack Dalrymple said on Thursday.

Flaring, the wasteful burning of natural gas that is extracted alongside crude, has become a widespread problem in the state, the nation’s second-largest oil producer.

In an effort to curb the problem, which harms quality of life and reduces tax revenue, state regulators will require companies to flare no more than 26 percent of produced gas starting Oct. 1, with standards tightening in the future.

If producers fail to meet the standards, they will have to curb production.

“A lot of people were surprised we took that step because there are going to be some operators impacted by this,” Dalrymple, a Republican, said in a speech to the North Dakota Association of Oil and Gas Producing Counties. “We are very committed to reducing the flaring of natural gas.”

Dalrymple, the chair of the state’s Industrial Commission, a three-person regulatory body with direct oil industry oversight, has been a vocal opponent of flaring.

In June, Dalrymple set an aggressive goal for the state’s oil and gas pipeline capacity to nearly double within two years, enabling more gas to be collected from well sites so it is not flared.


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Oilex Completes Chemical Intervention Work at Cambay-77H Well in Gujarat

Oilex Ltd reported Wednesday the successful completion of the chemical intervention work with a significant increase in flowback rates at Cambay-77H well in Cambay Production Sharing Contract (PSC) in Cambay Basin, Gujarat, India. As announced Aug. 21, the work was completed in accordance with the plan developed by Oilex on behalf of the Joint Venture. Cambay-77H continues to return frac water and additional treated water from coiled tubing (CT) operations along with producing gas and light oil. Water as a proportion of the production flow must be around 10 percent or less before testing can commence and it currently varies between 60 percent-90 percent. In order to improve water recovery efficiency, nitrogen gas lifting has also been implemented while the CT unit is at site.


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Oilex is also taking additional steps to reduce the operating cost structure during the flowback and clean-up of Cambay-77H including:

  • Removing the frac tree and replacing it with a standard production tree in anticipation of moving towards a formal production test
  • Demobilizing various equipment and associated personnel given the current understanding of the well’s performance

The initial compositional analysis of the separator gas from Cambay-77H has been received and concludes that Cambay-77H and Cambay-73 gas have very comparable compositions. As such Oilex will seek Joint Venture and Government of India endorsement to sell separator gas into the local “off-spec” gas market. Incremental operations to support “off-spec” sales should be minimal as significant equipment and personnel are already available at Cambay-77H site as part of the flowback and clean-up operations.

Managing Director of Oilex, Ron Miller, said:

“We remain very positive about Cambay-77H and look forward to getting through the water recovery and into the production testing phase of our proof of concept well. Having similar gas composition as Cambay-73 provides a great opportunity to increase near term production into a market where gas is in very short supply. Selling gas during clean-up and testing will be a welcome revenue stream in addition to the sale of crude oil produced from Cambay-77H.”

Neptune Marine Services Lands Subcontracts for Ichthys LNG Project Off WA

Neptune Marine Services Limited disclosed Wednesday that its Subsea Stabilization division was recently awarded two subcontracts by McDermott Australia for the Ichthys LNG (liquefied natural gas) Project offshore Western Australia. McDermott is the appointed main contractor for the Subsea Umbilicals, Risers and Flowlines (SURF) engineering, procurement, construction and installation portion of the project.

The initial subcontract includes the design and fabrication of specialist scour protection systems and the secondary scope entails the grouting of the Riser Support Structure (RSS) and grouting of the SPS. Neptune’s in-house engineering team in Perth provided the engineering design of the scour protection systems and the fabrication is managed at Neptune’s facilities in Asia. Delivery of the scour protection systems is expected to commence in the third quarter of 2014, with third-party installation of the offshore structures to begin the following quarter. Neptune will perform the associated grouting once the systems are fully installed in accordance with McDermott’s installation schedule. These scopes are subsequent to the successful delivery of concrete mattresses for the Ichthys Project earlier this year by Neptune’s Subsea Stabilisation division.

Neptune’s CEO, Robin King, said “it is pleasing to see some of our other businesses being awarded work on this prominent resource project. Following the completion of multiple scopes of work for another key client by other Neptune divisions, our Geomatics and ROV (remotely operated vehicle) businesses also performed the pre-lay survey and array installation for McDermott in 2014.”


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Northern Drills First Wells in Current Program in Alberta


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Junior producer Northern Petroleum reported Wednesday that the first two wells of its current three-well drilling program in Alberta, Canada have been drilled to target depth.

Northern said its drilling rig will now move to the location of the third well, which will spud towards the end of this month, while a service rig is expected on the site of the first well shortly in order to perforate the well and test it. Production test results are expected for all three wells during the second half of October.

The current drilling program follows the firm’s successful proof-of-redevelopment concept at Alberta’s Virgo field in May, which saw two new wells and a well re-entry brought into production.

Elsewhere, the company confirmed that it has been awarded two new permits in Italy where political changes and an improved business environment are “giving more confidence” that Northern will be able to make progress with its southern Adriatic permits during this year.

Northern also reported its first-half results Wednesday that shows its total oil production for the six months to June 30 amounted to 13,629 barrels – generating revenue for the firm of $1.1 million (1H 2013: $0.4 million).

Northern CEO Keith Bush commented in a company statement:

“The company has made considerable progress over the first half of the year during which the strategy of production led growth has been actively pursued. The three wells currently being drilled in Alberta will add to the production potential of the field and give us further confidence in our Keg River redevelopment play.”

InterOil Spuds Antelope-4 Appraisal Well in PRL 15 in Papua New Guinea

InterOil Corporation announced Tuesday that the company has started drilling the Antelope-4 appraisal well in the Elk-Antelope field in Petroleum Retention License (PRL) 15 in Papua New Guinea.

Antelope-4 is the first of at least two appraisal wells planned on the Antelope field.

The well lies about 0.62 mile (1 kilometer) south of Antelope-2 and is the most southern well in the Elk-Antelope field.

Antelope-5, the second appraisal well in the license, is expected to be drilled later this year.


InterOil Corporation is an independent oil and gas business with a primary focus on Papua New Guinea. InterOil’s assets include one of Asia’s largest undeveloped gas fields, Elk-Antelope, in the Gulf Province, and exploration licenses covering about 6,177 square miles (16,000 square kilometers). The company employs more than 2,000 staff and contractors. Its main offices are in Singapore and Port Moresby. InterOil is listed on the New York and Port Moresby stock exchanges.


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Leni Sees Goudron Well Flow at 700 Barrels per Day

Trinidad-focused junior energy firm Leni Gas & Oil reported Wednesday that it was seeing “a very encouraging” initial production rate at its GY-665 well on the Goudron Field after a series of production tests from the Gros Morne Sandstones.


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The firm said the open-hole flow rate from the well was calculated at 700 barrels of oil per day, and that it is currently producing 41-degree API gravity oil at a rate of 415 bopd through a 12/13-inch choke, with a well-head flowing pressure of 475 pounds per square inch.

GY-665 is the second well put on production in the company’s 30-well redevelopment at the Goudron field.

Leni Chief Executive Neil Ritson commented in a company statement:

“The second of our new wells is now on stream at a very encouraging initial production rate and flowing pressures. The remaining three wells drilled from this pad will be placed on production shortly. Well Services Rig 20 is being moved to the next pad to drill four further wells in the development program.”